Gregory Bell, a former Chicago-area hedge fund manager, admitted
to one count of wire fraud and faces up to 20 years in prison,
the sixth accomplice to plead guilty. Bell covered for Petters
(pictured here) by making it seem that the Minnesota Ponzi
schemer was repaying investments made by his fund, Lancelot
Investment Management.

SEC:
The Commission's Complaint alleges that Bell in turn invested
almost all of these assets in notes sold by Petters, falsely
assuring investors that he was taking steps to protect their
money and to verify the underlying transactions. The Complaint
alleges that when Petters's scheme began to unravel, Bell
participated in a series of sham transactions to conceal that
Petters owed more than $130 million in investor payments on the
notes. Bell and Lancelot Management also withdrew more than $40
million in fees from the hedge funds during the final months
before Petters's scheme collapsed.

That cover helped Petters attract massive investments from
hedge
funds and other institutions, ostensibly to buy consumer
electronic goods and re-sell them to nationwide big-box stores.
According to the government, there was no such buying and
selling.